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Resident Near SunCal Oak Knoll Warns Alameda of “the same shenanigans” by SunCal

On Wednesday we reported that, in a limited-distribution statement, SunCal responded to the concerns of Oakland hills residents worried about hazardous waste and fire hazards at the nearby SunCal Oak Knoll redevelopment project. Yesterday, Action Alameda News received a copy of a formal release by SunCal. And we received responses from both the City of Oakland and an Oakland hills resident.

Yesterday’s press release cites the $500,000 that SunCal claims to have pried from the Lehman Brothers bankruptcy trustee, for cleanup and maintenance at Oak Knoll. Lost in all the discussion over the Lehman bankruptcy is the fact that SunCal is responsible for day-to-day management at the site.

In SunCal’s statement, Oakland City Councilmember Larry Reid is quoted as saying “For more than a year, SunCal has been working with Lehman and the court to indentify [sic] these problems.” However, the court documents we’ve seen show that SunCal has been fighting tooth and nail with Lehman, trying to get DE Shaw into the bankrupt projects, including Oak Knoll, as a financial partner, and get Lehman pushed out. Equally, Lehman has apparently been working hard to squeeze SunCal out of the same projects.

Oakland resident Donald Mitchell, who previously filed a $115 million claim with the bankruptcy courts to get money for fire hazard abatement and damages related to Oak Knoll, responded to the press release with this statement:

That SunCal has finally, more than a year later, suddenly made a weak attempt to secure just $500,000 in funding for Oak Knoll is an insult to the community and clearly directly in response to Oak Knoll neighbors taking action to protect our city.

That level of funding represents just 2% – 3% of what is required for SunCal and Lehman to comply with the City of Oakland’s lawful order that the Oak Knoll site be completey and immediately abated of its blight and hazards- to include removal of all 90-plus half-demolished buildings.

Additionally there is evidence, being investigated by Bay Area Air Quality Management District, that the 167-acre property was willfully left contaminated with asbestos and asbestos contaminated waste (some of which appears to be strewn about the site in deteriorating and compromised bags left behind by an unpaid subcontractor, now contaminating the soil, creek and air).

Yet SunCal and Lehman continue to ignore Oakland’s order in defiance of the law. This pathetic behavior on SunCal’s part is a blatant attempt to deflect unfavorable media stories, which have begun to circulate, and a transparent attempt to avoid negative fallout as they attempt the same shenanigans in Alameda.

Late yesterday, the City Attorney’s office for Oakland weighed in as well, with a statement. The full text of the statement is included below:

Over the last year, the court-appointed bankruptcy trustee responsible for the SunCal Oak Knoll development has allowed the property to become a serious fire threat and health hazard for the people of Oakland.

Last week my office filed motions in bankruptcy court advising that it will take at least $6.7 million to complete the job of removing 90-plus tinderbox buildings, abating hazardous materials, cleaning up the trash dump conditions and clearing overgrown, fire-prone vegetation at the SunCal site.

The City Attorney’s Office appreciates SunCal’s announcement today that it will seek to secure $500,000 for maintenance and clean-up at Oak Knoll. While that’s a good start, it doesn’t come close to addressing the amount of work that needs to be done.

Like every other property owner, the trustee overseeing Oak Knoll is legally responsible for abating safety hazards and nuisance conditions. SunCal and its owner Lehman Brothers are clearly focused on protecting their assets in bankruptcy. However, these companies can’t ignore the law and their legal responsibilities in cities where they used to do business.

Today’s announcement is the first sign that SunCal and the bankruptcy trustee intend to comply with the Order to Abate served by the City in June. However, the bankruptcy court still must approve the payment, and the trustee has yet to file court documents asking for approval.

We look forward to working with SunCal and the bankruptcy trustee to complete the job and remove this real danger in the middle of our community.”

However, the City of Oakland has clean-up and hazardous waste abatement to do too, at their 5.5 acres of land at the site.

A copy of the City of Oakland order to abate fire hazards at Oak Knoll, referenced by both the City of Oakland Attorney’s office and Mr. Mitchell was sent to SunCal’s VP of Operations, Pat Keliher, who is in charge of the Alameda Point project.

3 comments to Resident Near SunCal Oak Knoll Warns Alameda of “the same shenanigans” by SunCal

  • Oakland Alan

    Update: Late in the day on 10/8/09 the Oak Knoll bankruptcy trustee, Steven Speier of Newport Beach, filed a declaration with the bankruptcy court, essentially telling the City of Oakland and its Fire Department to “F Off”. Trustee Speier says:

    “8. Following my consultations with representatives of the Voluntary Debtors [i.e. SunCal's management Bruce Elieff, Bruce Cook and Paul Couchot], and the Lehman Lenders [i.e. Bryan Marsal, Shai Waisman and Richard Pachulski], it is my belief that the demolition of buildings on the Oak Knoll Property, as referenced in the Surcharge Motion and the City of Oakland’s opposition, DOES NOT NEED TO TAKE PLACE WITHIN THE NEXT 120 DAYS BECAUSE THE IMMEDIATE HEALTH AND SAFETY CONCERNS CAN BE ADDRESSED THROUGH THE PROPOSED INCREASED SECURITY ON THE PROPERTY AND REPAIRS TO THE EXISTING FENCE.”

    “I declare under penalty of perjury that the foregoing is true and correct. Steven M. Speier”

    Obvious Mr. Speier is under the mis-impression that he has any choice in this matter. When the City of Oakland Fire Department orders you to abate a fire hazard on your property, you do it or face fines and jail time.

    Oakland residents who would like to express their thoughts to Steven Speier can contact him at Tel. – 949.222.2999 or Fax – 949.222.2989.

    Oakland residents who would like to express their thoughts to Bruce Elieff and Bruce Cook of SunCal can contact them at T: (949) 777-4000 and F: (949) 777-4050.

    Oakland residents who would like to express their thoughts to Bryan Marsal of Lehman ALI, Inc. can contact him at Tel: 212 759-4433 and
    Fax: 212 759-5532

  • Oakland Alan

    By the way, SunCal’s claim that the Trustee has “stipulated” to release $500,000 to them to pay for weed abatement, fence repair and an armed security patrol is simply b.s. There is no such document in the Bankruptcy Court file.

    Hey Mr. Elieff, owner of SunCal, your guards are not on the property. Are you going to write a personal check to bring them in? Oh, I forgot, your General Counsel Bruce Cook admitted in Bankruptcy Court records that your company stiffed the security company in October 2008 and they walked off the job.

    In addition, without even asking for the City’s consent, Lehman and the Trustee delayed the scheduled 10/15/09 hearing on the Abatement Order to 11/2/09. They didn’t even bother to ask for SunCal’s consent to that delay. That kind of shows you how little importance or credibility SunCal has on the Abatement Order issue at Oak Knoll.

  • Alan

    Further Update:

    Even Lehman/SunCal’s fire liability insurance carrier acknowledges that Oak Knoll is a terrible fire risk to the surrounding community.

    In Bankruptcy Court Document 644, Exhibit A, Page 28, SunCal asks the court to allow payment of $1,857,000 in fire insurance premiums, for the Oak Knoll property alone, TO PROVIDE INSURANCE FOR 4 MONTHS ONLY. That’s $46,400 PER MONTH for fire insurance premiums, over and above the regular liability insurance SunCal Oak Knoll, LLC carries.

    Document 644 was supposed to be used to obtain the bankruptcy court’s approval for fire insurance for September 2009 to December 2009. Of course, we’re past September and into October, and of course neither Judge Erithe Smith, bankruptcy Trustee Steven Speier nor the myriad of law breakers at Lehman have bothered to approve making the September and October insurance payments.

    Insurance won’t stop the massive loss of homes, possessions, memories and even lives caused by a fire storm coming from Oak Knoll. Instead, it would only provide a defense to one irresponsible person, bankruptcy Trustee Steven Speier. I wonder if he’s noticed his fire liability insurance has expired because of non-payment of premiums?

    Two other little gems from Document 644:

    SunCal is supposed to collect $50,000 per month from the bankruptcy trustee to “manage” or rather mismanage Oak Knoll for Trustee Steven Speier. Based on Document 644, it looks like they haven’t been paid for September or October.

    According to some imbecile named Frank who works for SunCal, he only wants to tear down the old hospital building, at a cost of $1.5 Million, rather than tearing down all of the other vandalized, blighted buildings which the City says will cost an additional $5 Million.

    Then there’s Lehman’s response to document 644. They don’t want to let the Lehman/SunCal debtors spend money to comply with the City’s Fire Hazard Abatement Order at Oak Knoll.

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